Many communities in the Northeast see district heating as a possible solution to their energy problems. With district heating, a central plant pumps hot water through underground pipes to heat buildings in a neighborhood. 65% of Denmark uses district heating and if done right in the U.S., it could provide inexpensive heat and power with great efficiency using wood as its fuel.

In Colebrook, NH, hopes are high that district heating could transform the local economy. As part of a collaboration with Northeast stations, New Hampshire Public Radio’s Jon Greenberg reports.

The town of Colebrook sits 15 miles from Canada on the New Hampshire-Vermont border. The fate of this community of about 2,300 people has been tied to the forest for many generations. Today, the picture is grim. The recent closure of a nearby furniture factory has pushed the official unemployment rate to over 12%. Unofficially, town leaders estimate one out of four workers lack a full-time job.

Kevin McKinnon, the town’s head of Public Works, stands on a hill high above Colebrook. From here, the town spreads out below, a small island of roof tops in an ocean of woodland.

“The congregational church spire sticks up like a thumb out there and that’s centrally located in town and we would run about a mile radius around that.”

One day, McKinnon sees a network of well-insulated pipes running beneath those town streets, all connected to a central boiler. Inside individual buildings, heat exchangers would draw energy from the water, then send it back to the plant for another dose of heat. The fuel would come from those surrounding woods.

We drive into town along a possible route for the piping. Dick Harris, a member of the Colebrook energy committee points to the elementary school.

“They had an astronomical bill last winter for oil consumption. So, there's an elementary school, there's a high school in town, town office building, department of public works building, we'd all benefit from the use of district heating.”

In Colebrook where the average temperature in February is 14 degrees, there is plenty of interest in affordable heat -- and electricity as well. The hope is to build a facility that burns low-grade wood with 90% efficiency. With such a system, town leaders think they could attract new businesses, create new jobs, including work for loggers and truckers.

More than a dozen towns and cities across the Northeast, from Niagara Falls to Montpelier to Portland, have similar dreams. Uncle Sam has dangled about $450 million to help pay for a variety of energy efficiency plans that could include district heating.

A big grant is a key ingredient for turning these dreams into reality. Such projects can cost $10 million to $20 million or more. Jerry Pittman is an engineer with Minneapolis-based NRG Thermal, experts in district energy. Pittman says in order for a project to make sense, you have to pack plenty of users into a tight space.

“If you have a small community where the load capacity is spread over large distances, it becomes very expensive to put the piping into the ground to connect them all up.”

One of the biggest hurdles is psychological. Some people are reluctant to get their heat the way they get water or electricity, as a service they tap into, rather than from a boiler in their own basement.

District heating requires relatively little fuel but across the Northeast, there are proposals for large wood pellet and power plants, each consuming upwards of 200,000 tons per year. Low-grade wood is cheap and abundant today, but there are concerns about sustainability in the long run.